Mistras Group, Inc.

Previous wording

The following Management’s Discussion and Analysis (“MD&A”) provides a discussion of our results of operations and financial position for the three and six months ended June 30, 2026 and 2025. The MD&A should be read together with our Unaudited Condensed Consolidated Financial Statements and related notes included in Item 1 in this Quarterly Report on Form 10-Q (the "Quarterly Report") and our audited consolidated financial statements and related notes included in our 2025 Annual Report. Unless otherwise specified or the context otherwise requires, “Mistras,” “the Company,” “we,” “us” and “our” refer to Mistras Group, Inc. and its consolidated subsidiaries. The MD&A includes the following sections:

Current wording

The following Management’s Discussion and Analysis (“MD&A”) provides a discussion of our results of operations and financial position for the three and nine months ended September 30, 2026 and 2025. The MD&A should be read together with our Unaudited Condensed Consolidated Financial Statements and related notes included in Item 1 in this Quarterly Report on Form 10-Q (the "Quarterly Report") and our audited consolidated financial statements and related notes included in our 2025 Annual Report. Unless otherwise specified or the context otherwise requires, “Mistras,” “the Company,” “we,” “us” and “our” refer to Mistras Group, Inc. and its consolidated subsidiaries. The MD&A includes the following sections:

Previous wording

This Quarterly Report contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934 (“Exchange Act”). Such forward-looking statements include those that express plans, anticipation, intent, contingency, goals, targets or future development and/or otherwise are not statements of historical fact. These forward-looking statements are based on our current expectations and projections about future events and they are subject to risks and uncertainties known and unknown that could cause actual results and developments to differ materially from those expressed or implied in such statements.

Current wording

This Quarterly Report contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including statements regarding the anticipated timing and completion of the Merger, the anticipated benefits of the Merger, the consideration to be received by the Company’s stockholders in connection with the Merger, and other statements about the future plans, objectives, expectations and intentions of the Company. Such forward-looking statements include those that express plans, anticipation, intent, contingency, goals, targets or future development and/or otherwise are not statements of historical fact. These forward-looking statements are based on our current expectations and projections about future events and they are subject to risks and uncertainties known and unknown that could cause actual results and developments to differ materially from those expressed or implied in such statements.

Previous wording

In some cases, you can identify forward-looking statements by terminology, such as “goals,” or “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “may,” “could,” “should,” “would,” “predicts,” “appears,” “projects,” or the negative of such terms or other similar expressions. You are urged not to place undue reliance on any such forward-looking statements, any of which may turn out to be wrong due to inaccurate assumptions, various risks, uncertainties or other factors known and unknown. Factors that could cause or contribute to differences in results and outcomes from those in our forward-looking statements, including any impacts from the imposition of tariffs or other trade restrictions, changes to the

Current wording

In some cases, you can identify forward-looking statements by terminology, such as “goals,” or “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “may,” “could,” “should,” “would,” “predicts,” “appears,” “projects,” or the negative of such terms or other similar expressions. Forward-looking statements are inherently subject to risks and uncertainties, many of which are beyond the Company’s control. These risks and uncertainties include, but are not limited to, the following: (i) the ability to complete the Merger on the anticipated timeline, or at all; (ii) the satisfaction or waiver of the conditions to the completion of the Merger, including the approval by the Company’s stockholders and receipt of the required regulatory approvals; (iii) the receipt of required regulatory approvals on the terms anticipated or at all, or the imposition of conditions on such approvals that could reduce the anticipated benefits of the Merger or cause the parties to abandon the Merger; (iv) the Merger may involve unexpected costs, liabilities or delays, including the payment of the Company Termination Fee (as defined herein) to Parent by the Company; (v) the Company may be adversely affected by other economic, business, legislative, regulatory and/or competitive factors; (vi) the outcome of any stockholder demands or legal proceedings that have been or may be instituted against the Company and others relating to the Merger Agreement or the Merger; (vii) the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement; (viii) potential disruption to the business of the Company as a result of the announcement and pendency of the Merger; (ix) the diversion of management attention from the Company’s ongoing business operations as a result of the Merger; (x) adverse effects on the Company’s ability to retain and hire key personnel as a result of the announcement or pendency of the Merger; (xi) volatility in the Company’s stock price prior to the completion of the Merger; (xii) changes or developments in the industries in which the Company competes, general economic conditions, or conditions in the financial markets or capital markets; (xiii) any impacts from the imposition of tariffs or other trade restrictions and changes to U.S. trade policy, including the outcome of pending litigation regarding tariffs and the availability of refunds of tariffs previously imposed under the International Emergency Economic Powers Act; (xiv) impacts and uncertainty arising from geopolitical instability and conflicts, including those related to the conflict involving the U.S. and Iran and the war in Ukraine, and resulting volatility in oil and natural gas prices and in capital spending and maintenance activity by our oil and gas customers; (xv) the creditworthiness of our customers and our ability to collect our accounts receivable; (xvi) changes in interest rates and foreign currency exchange rates; …

Excerpt shortened here; the source contains the full paragraph.

Previous wording

Our cash position and liquidity remains strong. As of June 30, 2026, our cash and cash equivalents balance was approximately $22.0 million, and we had available borrowing capacity of up to $106.3 million under the revolving credit facility under our Credit Agreement.

Current wording

Our cash position and liquidity remain strong. As of September 30, 2026, our cash and cash equivalents balance was approximately $19.0 million, and we had available borrowing capacity of up to $101.7 million under the revolving credit facility under our Credit Agreement.

Previous wording

Credit Agreement from July 30, 2027 to July 28, 2028. In connection with the Amendment, the Company incurred an extension fee equal to a total of 0.15% of the aggregate committed amount of the revolving credit facility and term loan held by participating lenders. There were no other changes to the material terms of the Credit Agreement, including the applicable interest rate provisions and financial covenants, which remained substantially unchanged. Refer to Note 11 -Long-Term Debtfor more details regarding the terms of the Credit Agreement.

Current wording

On August 5, 2026, the Company entered into an amendment (the "Amendment") to its credit agreement dated August 1, 2022 (as amended, the "Credit Agreement"), with the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent. The Amendment extended the maturity date of the Company’s $190.0 million revolving credit facility and approximately $87.3 million outstanding term loan under the Credit Agreement from July 30, 2027 to July 28, 2028. In connection with the Amendment, the Company incurred an extension fee equal to a total of 0.15% of the aggregate committed amount of the revolving credit facility and term loan held by participating lenders. There were no other changes to the material terms of the Credit Agreement, including the applicable interest rate provisions and financial covenants, which remained substantially unchanged. Refer to Note 11 -Long-Term Debtfor more details regarding the terms of the Credit Agreement.

Previous wording

The global trade landscape continues to be highly volatile. During 2025, the U.S. government implemented a series of trade tariffs on goods imported into the U.S. from various countries, many of which prompted reciprocal tariffs and other trade measures affecting U.S. exports. The ongoing tariff environment remains complex and continues to evolve as legal proceedings and trade negotiations progress. In February 2026, the U.S. Supreme Court ruled that the International Emergency Economic Powers Act ("IEEPA"), which the U.S. government relied upon to impose certain tariffs, does not authorize the imposition of tariffs. Following that decision, the U.S. Court of International Trade directed the U.S. Customs and Border Protection ("CBP") to begin processing refunds of previously collected IEEPA tariffs, and during the second quarter of 2026, CBP commenced accepting and processing refund claims. In response to the U.S. Supreme Court's ruling, the U.S. administration implemented replacement tariffs under alternative statutory authorities, including Section 122 of the Trade Act of 1974, while also pursuing additional tariff actions under other existing trade authorities. Certain of these replacement tariffs have also been challenged in court, and the related litigation remains ongoing. On July 24, 2026, the U.S. administration announced the implementation of additional tariffs ranging from 10% to 12.5% on imports from numerous trading partners under Section 301 of the Trade Act of 1974. Accordingly, the ultimate scope, duration and financial impact of U.S. trade measures remain uncertain. Ongoing changes to trade policies and related uncertainty may affect global economic conditions, supply chains and costs, and may reduce trade between the U.S. and impacted countries. Tariffs and trade barriers have not had a material effect on our business or results of operations during 2026 to date. However, new tariffs or other trade measures could result in increased costs for us or our suppliers and could impact the import of materials by our customers, including materials subject to our inspection and testing services, which could adversely affect demand for our services.

Current wording

to begin processing refunds of previously collected IEEPA tariffs, and CBP has since processed refund claims in phases, most recently commencing in October 2026 the processing of refunds for certain finally liquidated entries. In October 2026, the U.S. Court of International Trade also certified a class of importers seeking IEEPA tariff refunds and the U.S. government’s appeals in the refund litigation remain pending. In response to the U.S. Supreme Court's ruling, the U.S. administration implemented replacement tariffs under alternative statutory authorities, including a temporary tariff under Section 122 of the Trade Act of 1974, which expired on July 24, 2026 at the end of its 150-day statutory period. The U.S. Court of International Trade ruled against the Section 122 tariffs, but that ruling has been stayed pending appeal, and the related litigation remains ongoing. Effective July 24, 2026, the U.S. administration implemented additional tariffs ranging from 10% to 12.5% on imports from numerous trading partners under Section 301 of the Trade Act of 1974, which are also subject to legal challenge. Accordingly, the ultimate scope, duration and financial impact of U.S. trade measures remain uncertain. Ongoing changes to trade policies and related uncertainty may affect global economic conditions, supply chains and costs, and may reduce trade between the U.S. and impacted countries. Tariffs and trade barriers have not had a material effect on our business or results of operations during 2026 to date. However, new tariffs or other trade measures could result in increased costs for us or our suppliers and could impact the import of materials by our customers, including materials subject to our inspection and testing services, which could adversely affect demand for our services.

Previous wording

Geopolitical tensions in the Middle East, including the conflict involving the U.S. and Iran, have contributed to increased volatility in global energy markets and broader macroeconomic uncertainty. The conflict has increased uncertainty surrounding global energy supplies, international shipping routes and supply chains, contributing to fluctuations in oil and natural gas prices and increased costs for certain materials and transportation. Fluctuations in crude oil and natural gas prices may influence capital spending and maintenance activity by customers in the oil and gas sector, which could affect demand for certain of our services, particularly field inspection and asset integrity solutions. Additionally, continued instability in the Middle East could contribute to supply chain disruptions, changes in foreign currency exchange rates, and delays in customer projects. While we have not experienced material impacts to date, the situation remains dynamic, and we continue to monitor developments and assess potential impacts on our operations, financial condition, and results of operations.

Current wording

Geopolitical tensions in the Middle East, including the conflict involving the U.S. and Iran that began in February 2026, have contributed to increased volatility in global energy markets and broader macroeconomic uncertainty. The conflict has disrupted shipping through the Strait of Hormuz and increased uncertainty surrounding global energy supplies, international shipping routes and supply chains, contributing to fluctuations in oil and natural gas prices and increased costs for certain materials and transportation. Efforts to resolve the conflict have not been successful to date, and renewed escalation remains possible. Fluctuations in crude oil and natural gas prices may influence capital spending and maintenance activity by customers in the oil and gas sector, which could affect demand for certain of our services, particularly field inspection and asset integrity solutions. Additionally, continued instability in the Middle East could contribute to supply chain disruptions, changes in foreign currency exchange rates, and delays in customer projects. While we have not experienced material impacts to date, the situation remains dynamic, and we continue to monitor developments and assess potential impacts on our operations, financial condition, and results of operations.

Previous wording

The Company prepares its consolidated financial statements in accordance with GAAP. In this MD&A under the heading "Income from Operations", the non-GAAP financial performance measure "Income from operations before special items” is used for each of our three operating segments, “Corporate and Eliminations” and the "Total Company", with tables reconciling the measure to a financial measure under GAAP. This presentation excludes from "Income from Operations" (a) reorganization and other costs, which includes items such as severance, labor relations matters and asset and lease termination costs and (b) environmental expense, which relates to costs associated with the environmental matter at the Phoenix lab operated by Mistras Arizona, as described in Note 13 to the Unaudited Condensed Consolidated Financial Statements in this Quarterly Report. These adjustments have been excluded from the GAAP measure because these expenses and credits are not related to our or any individual segment's core business operations. Our management uses this non-GAAP measure as a measure of operating performance to assist in comparing performance from period to period on a consistent basis, as a measure for planning and forecasting overall expectations and for evaluating actual results against such expectations. We believe investors and other users of our financial statements benefit from the presentation of this non-GAAP measure in evaluating our performance. Income from operations before special items excludes the identified adjustments, which provides additional tools to compare our core business operating performance on a consistent basis and measure underlying trends and results in our business. Income from operations before special items is not used to determine incentive compensation for executives or employees, nor is it a replacement for the reported GAAP financial performance and/or necessarily comparable to the non-GAAP financial measures of other companies. Any measure that eliminates the foregoing items has material limitations as a performance measure and should not be considered an alternative to net income or any other measures derived in accordance with GAAP. Because Income from operations before special items may not be calculated in the same manner by all companies, this measure may not be comparable to other similarly titled measures used by other companies.

Current wording

The Company prepares its consolidated financial statements in accordance with GAAP. In this MD&A under the heading "Income from Operations", the non-GAAP financial performance measure "Income from operations before special items” is used for each of our three operating segments, “Corporate and Eliminations” and the "Total Company", with tables reconciling the measure to a financial measure under GAAP. This presentation excludes from "Income from Operations" (a) reorganization and other costs, which includes items such as severance, labor relations matters and asset and lease termination costs, (b) transaction-related expense, which are expenses that consist of legal, financial advisory and other professional fees incurred in connection with the Merger Agreement and beginning in the three months ended September 30, 2026, is excluded from this measure, and (c) environmental expense, which relates to costs associated with the environmental matter at the Phoenix lab operated by Mistras Arizona, as described in Note 13 to the Unaudited Condensed Consolidated Financial Statements in this Quarterly Report. These adjustments have been excluded from the GAAP measure because these expenses and credits are not related to our or any individual segment's core business operations. Our management uses this non-GAAP measure as a measure of operating performance to assist in comparing performance from period to period on a consistent basis, as a measure for planning and forecasting overall expectations and for evaluating actual results against such expectations. We believe investors and other users of our financial statements benefit from the presentation of this non-GAAP measure in evaluating our performance. Income from operations before special items excludes the identified adjustments, which provides additional tools to compare our core business operating performance on a consistent basis and measure underlying trends and results in our business. Income from operations before special items is not used to determine incentive compensation for executives or employees, nor is it a replacement for the reported GAAP financial performance and/or necessarily comparable to the non-GAAP financial measures of other companies. Any measure that eliminates the foregoing items has material limitations as a performance measure and should not be considered an alternative to net income or any other measures derived in accordance with GAAP. Because Income from operations before special items may not be calculated in the same manner by all companies, this measure may not be comparable to other similarly titled measures used by other companies.

Previous wording

Condensed consolidated results of operations for the three and six months ended June 30, 2026 and 2025 were as follows:

Current wording

Condensed consolidated results of operations for the three and nine months ended September 30, 2026 and 2025 were as follows:

Previous wording

Revenue was $193.1 million for the three months ended June 30, 2026, an increase of $7.7 million, or 4.2%, compared with the three months ended June 30, 2025.

Current wording

Revenue was $204.6 million for the three months ended September 30, 2026, an increase of $9.1 million, or 4.6%, compared with the three months ended September 30, 2025.

Previous wording

Revenue by segment for the three and six months ended June 30, 2026 and 2025 were as follows:

Current wording

Revenue by segment for the three and nine months ended September 30, 2026 and 2025 were as follows:

Previous wording

In the three months ended June 30, 2026, total revenue increased 4.2% versus the prior year comparable period due predominantly to a low-single-digit organic increase driven by increases in the aerospace and defense, power generation and transmission, infrastructure, research, and engineering, and petrochemical end markets. North America segment revenue increased 5.8%, driven predominantly by the aerospace and defense, power generation and transmission, infrastructure, research, and engineering, and process industries end markets as a result of strong market demand. International segment revenue decreased 2.7%, due predominantly to a mid-single-digit organic decrease driven by lower market demand. The decrease was partially offset by a low-single-digit favorable impact of foreign exchange rates. Products and Systems segment revenue increased by 43.0%, due to increased sales volume and shipments as compared to the prior year comparable period.

Current wording

In the three months ended September 30, 2026, total revenue increased 4.6% versus the prior year comparable period due predominantly to a low-single-digit organic increase driven by increases in the aerospace and defense, power generation and transmission, industrials, process industries and infrastructure, research and engineering end markets. North America segment revenue increased 3.6%, driven predominantly by the aerospace and defense, industrials, power generation and transmission, process industries, and infrastructure, research and engineering end markets as a result of strong market demand. International segment revenue increased 12.6%, driven predominately by the oil and gas, aerospace and defense, industrials, infrastructure, research and engineering, and petrochemical end markets as a result of strong market demand. Products and Systems segment revenue increased by 6.1%, due to increased sales volume and shipments as compared to the prior year comparable period.

Previous wording

Oil and gas customer revenue comprised approximately 49% and 55% of total revenue for the three months ended June 30, 2026 and 2025, respectively. Aerospace and defense customer revenue comprised approximately 14% and 13% of total revenue for the three months ended June 30, 2026 and 2025, respectively. The Company’s top ten customers comprised approximately 35% of total revenue for both the three months ended June 30, 2026 and 2025, with no customer accounting for 10% or more of total revenue in either three-month period.

Current wording

Oil and gas customer revenue comprised approximately 49% and 54% of total revenue for the three months ended September 30, 2026 and 2025, respectively. Aerospace and defense customer revenue comprised approximately 14% and 12% of total revenue for the three months ended September 30, 2026 and 2025, respectively. The Company’s top ten customers comprised approximately 31% of total revenue for the three months ended September 30, 2026 and 36% for the three months ended September 30, 2025, with no customer accounting for 10% or more of total revenue in either three-month period.

Previous wording

In the six months ended June 30, 2026, total revenue increased 4.4% versus the prior year comparable period due predominantly to a low single-digit organic increase and a low-single-digit favorable impact of foreign exchange rates. North America segment revenue increased 5.4% versus the prior year comparable period, driven by the aerospace and defense, power generation and transmission, infrastructure, research, and engineering end markets. International segment revenue increased 2.8% versus the prior year comparable period, due to a mid-single-digit favorable impact of foreign exchange rates, partially offset by a low-single-digit organic decrease. Products and Systems segment revenue increased by 12.7%, due to increased sales volume and shipments as compared to the prior year comparable period.

Current wording

In the nine months ended September 30, 2026, total revenue increased 4.5% versus the prior year comparable period due predominantly to a low single-digit organic increase. North America segment revenue increased 4.8% versus the prior year comparable period, driven by the aerospace and defense, power generation and transmission, infrastructure, research, and engineering end markets. International segment revenue increased 6.0% versus the prior year comparable period, due to low single-digit organic growth and a low single-digit favorable impact of foreign exchange rates. Organic growth in the international segment was primarily driven by the aerospace and defense, industrials, infrastructure, research and engineering and petrochemical end markets. Products and Systems segment revenue increased by 10.0%, due to increased sales volume and shipments as compared to the prior year comparable period.

Previous wording

Oil and gas customer revenue comprised approximately 50% and 57% of total revenue for the six months ended June 30, 2026 and 2025, respectively. Aerospace and defense customer revenue comprised approximately 15% and 13% of total revenue for the six months ended June 30, 2026 and 2025, respectively. The Company’s top ten customers comprised approximately 35% and 37% of total revenue for the six months ended June 30, 2026 and 2025, respectively, with no customer accounting for 10% or more of total revenue in either six-month period.

Current wording

Oil and gas customer revenue comprised approximately 49% and 56% of total revenue for the nine months ended September 30, 2026 and 2025, respectively. Aerospace and defense customer revenue comprised approximately 15% and 13% of total revenue for the nine months ended September 30, 2026 and 2025, respectively. The Company’s top ten customers comprised approximately 34% and 36% of total revenue for the nine months ended September 30, 2026 and 2025, respectively, with no customer accounting for 10% or more of total revenue in either nine-month period.

Previous wording

Integrated Field Solutions revenue is comprised of revenue derived from on-site asset inspection, maintenance, and related technical services performed by our technicians at customer locations, as well as data-driven solutions, including software, analytics, and implementation services that provide insights and recommendations to enhance asset integrity and performance. Integrated Field Solutions revenue increased by $5.8 million for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025 and increased by $6.5 million for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025, primarily due to increases in sales volume in our power generation and transmission and infrastructure, research and engineering end markets as a result of strong market demand, partially offset by decreases in sales volume in our oil and gas end market within our North America and International segments.

Current wording

Integrated Field Solutions revenue is comprised of revenue derived from on-site asset inspection, maintenance, and related technical services performed by our technicians at customer locations, as well as data-driven solutions, including software, analytics, and implementation services that provide insights and recommendations to enhance asset integrity and performance. Integrated Field Solutions revenue increased by $10.6 million for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025 and increased by $17.2 million for the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025, primarily due to increases in sales volume in our power generation and transmission, industrials and infrastructure, research and engineering end markets as a result of strong market demand, partially offset by decreases in sales volume in our oil and gas end market within our North America segment.

Previous wording

In-Laboratory Services revenue is comprised of quality assurance inspections of components and materials at our in-house laboratory facilities. In-Laboratory Services revenue increased by $1.9 million for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025, and increased by $8.6 million for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025, primarily due to increased sales volumes in our aerospace and defense end market in our North America segment.

Current wording

In-Laboratory Services revenue is comprised of quality assurance inspections of components and materials at our in-house laboratory facilities. In-Laboratory Services revenue decreased by $1.6 million for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025, due to decreased sales volumes in our North America segment. In-Laboratory Services revenue increased by $7.0 million for the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025, primarily due to increased sales volumes in our aerospace and defense end market in our North America segment.

Previous wording

Gross profit increased by $2.5 million, or 4.6%, in the three months ended June 30, 2026 versus the prior year comparable period primarily due toan improved and diversified business mix and operating efficiencies.

Current wording

Gross profit increased by $3.8 million, or 6.6%, in the three months ended September 30, 2026 versus the prior year comparable period primarily due toan improved and diversified business mix and operating efficiencies.

Previous wording

Gross profit by segment for the three and six months ended June 30, 2026 and 2025 was as follows:

Current wording

Gross profit by segment for the three and nine months ended September 30, 2026 and 2025 was as follows:

Previous wording

Gross profit margin was 29.2% and 29.1% for the three-month periods ended June 30, 2026 and 2025, respectively. Gross profit margin for the North America segment increased by 0.2% for the three months ended June 30, 2026 as compared to the prior year comparable period primarily due to an improved and diversified business mix and operating efficiencies. International segment realized a 0.4% decline in gross profit margin to 31.0% for the three months ended June 30, 2026 as compared to the prior year comparable period primarily due to a less favorable sales mix in the current year period. Products and Systems segment gross margin had a decrease of 2.0% to 46.8% for the three months ended June 30, 2026 primarily due to a less favorable sales mix as compared to the prior period.

Current wording

Gross profit margin was 30.3% and 29.8% for the three-month periods ended September 30, 2026 and 2025, respectively. Gross profit margin for the North America segment increased 0.1% to 28.2% for the three months ended September 30, 2026 as compared to the prior year comparable period primarily due to a more favorable sales mix in the current year period. International segment realized a 1.1% increase in gross profit margin to 32.6% for the three months ended September 30, 2026 as compared to the prior year comparable period primarily due to an improved and diversified business mix and operating efficiencies. Products and Systems segment gross margin decreased 4.4% to 49.9% for the three months ended September 30, 2026 primarily due to a less favorable sales mix as compared to the prior period.

Previous wording

Gross profit margin was 27.9% and 27.3% for the six-month periods ended June 30, 2026 and 2025, respectively. Gross profit margin for the North America segment increased 0.7% increase to 26.2% for the six months ended June 30, 2026 as compared to the prior year comparable period primarily due to an improved and diversified business mix and operating efficiencies. International segment profit margin remained flat period over period. Products and Systems segment gross margin had a decline of 6.6% to 44.2% for the six months ended June 30, 2026 primarily due to a less favorable sales mix as compared to the prior period.

Current wording

Gross profit margin was 28.8% and 28.2% for the nine-month periods ended September 30, 2026 and 2025, respectively. Gross profit margin for the North America segment increased 0.5% to 26.9% for the nine months ended September 30, 2026 as compared to the prior year comparable period primarily due to an improved and diversified business mix and operating efficiencies. International segment gross profit margin increased 0.4% to 30.6% due to an improved and diversified business mix and operating efficiencies. Products and Systems segment gross margin had a decline of 5.8% to 46.4% for the nine months ended September 30, 2026 primarily due to a less favorable sales mix as compared to the prior period.

Previous wording

Operating expenses for the three and six months ended June 30, 2026 and 2025 was as follows:

Current wording

Operating expenses for the three and nine months ended September 30, 2026 and 2025 was as follows:

Previous wording

Operating expenses decreased $2.0 million, or 4.4%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. Selling, general and administrative expenses decreased $1.1 million during the three months ended June 30, 2026 compared to the three months ended June 30, 2025, due to ongoing cost management activities. Reorganization and other costs decreased by $1.4 million to $1.5 million as compared to the prior year comparable period due to lower restructuring activity, including workforce reductions and laboratory rationalization initiatives in the three months ended June 30, 2025, which did not recur at similar levels during the current year period. Environmental expense decreased by $0.1 million as compared to the prior year comparable period due to lower expenses related to the ongoing remediation efforts related to the Mistras Arizona claim discussed in Note 13 - Commitments and Contingencies. Research and engineering expenses remained flat period over period. Depreciation and amortization increased by $0.6 million during the three months ended June 30, 2026 compared to the three months ended June 30, 2025.

Current wording

Operating expenses increased $9.2 million, or 24.3%, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. Selling, general and administrative expenses increased $5.0 million during the three months ended September 30, 2026 compared to the three months ended September 30, 2025, primarily due to strategic investments in our operations to support commercial execution and promote growth in our strategic markets, while maintaining discipline in overhead costs. Reorganization and other costs decreased by $0.3 million to $1.5 million as compared to the prior year comparable period due to lower restructuring activity, including workforce reductions and laboratory rationalization initiatives in the three months ended September 30, 2025, which did not recur at similar levels during the current year period. Transaction-related expense was $4.3 million during the three months ended September 30, 2026, due to costs associated with the Merger Agreement. Environmental expense decreased by $0.3 million as compared to the prior year comparable period. Research and engineering expenses remained flat period over period. Depreciation and amortization increased by $0.4 million during the three months ended September 30, 2026 compared to the three months ended September 30, 2025.

Previous wording

Operating expenses decreased $3.9 million, or 4.4%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. Selling, general and administrative expenses increased $0.3 million during the six months ended June 30, 2026 compared to the six months ended June 30, 2025, due to strategic investments in our operations to support commercial execution and promote growth in our strategic markets, while maintaining discipline in overhead cost. Reorganization and other costs decreased by $4.0 million to $2.0 million as compared to the prior year comparable period due to lower restructuring activity, including workforce reductions and laboratory rationalization initiatives in the six months ended June 30, 2025, which did not recur at similar levels during the current year period. Environmental expense decreased by $0.7 million as compared to the prior year comparable period due to lower expenses related to the ongoing remediation efforts related to the Mistras Arizona claim discussed in Note 13 - Commitments and Contingencies. Research and engineering expenses decreased by $0.1 million during the six months ended June 30, 2026 compared to the six months ended June 30, 2025. Depreciation and amortization increased by $0.7 million during the six months ended June 30, 2026 compared to the six months ended June 30, 2025.

Current wording

Operating expenses increased $5.3 million, or 4.2%, for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. Selling, general and administrative expenses increased $5.3 million during the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025, due to strategic investments in our operations to support commercial execution and promote growth in our strategic markets, while maintaining discipline in overhead costs. Reorganization and other costs decreased by $4.3 million to $3.5 million as compared to the prior year comparable period due to lower restructuring activity, including workforce reductions and laboratory rationalization initiatives in the nine months ended September 30, 2025, which did not recur at similar levels during the current year period. Transaction-related expense was $4.3 million during the nine months ended September 30, 2026, due to costs associated with the Merger Agreement. Environmental expense decreased by $1.0 million as compared to the prior year comparable period. Research and engineering expenses decreased by $0.1 million during the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. Depreciation and amortization increased by $1.2 million during the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025.

Previous wording

For the three months ended June 30, 2026, income from operations (GAAP) increased $4.5 million, or 53.6%, compared to the three months ended June 30, 2025, while income from operations before special items (non-GAAP) increased by $3.0 million, or 25.5%. As a percentage of revenue, income from operations before special items increased by 130 basis points to 7.7% in the three months ended June 30, 2026 compared to 6.4% in the three months ended June 30, 2025.

Current wording

For the three months ended September 30, 2026, income from operations (GAAP) decreased $5.3 million, or 26.2%, compared to the three months ended September 30, 2025, while income from operations before special items (non-GAAP) decreased by $1.6 million, or 7.4%. As a percentage of revenue, income from operations before special items decreased by 130 basis points to 10.1% in the three months ended September 30, 2026 compared to 11.4% in the three months ended September 30, 2025.

Previous wording

For the six months ended June 30, 2026, income from operations (GAAP) increased $10.2 million, or 137.7%, compared to the six months ended June 30, 2025, while income from operations before special items (non-GAAP) increased by $5.4 million, or 37.5%. As a percentage of revenue, income from operations before special items increased by 130 basis points to 5.5% in the six months ended June 30, 2026 compared to 4.2% in the six months ended June 30, 2025.

Current wording

For the nine months ended September 30, 2026, income from operations (GAAP) increased $4.9 million, or 17.6%, compared to the nine months ended September 30, 2025, while income from operations before special items (non-GAAP) increased by $3.8 million, or 10.3%. As a percentage of revenue, income from operations before special items increased by 40 basis points to 7.2% in the nine months ended September 30, 2026 compared to 6.8% in the nine months ended September 30, 2025.

Previous wording

Interest expense was approximately $4.1 million and $4.2 million for the three months ended June 30, 2026 and 2025, respectively. This decrease of $0.1 million in interest expense was a result of lower interest rates during the three months ended June 30, 2026 in comparison to the prior year comparable period. Interest expense was approximately $7.0 million and $7.6 million for the six months ended June 30, 2026 and 2025, respectively. This decrease of $0.5 million in interest expense was a result of lower interest rates and lower average borrowings outstanding during the six months ended June 30, 2026 in comparison to the prior year comparable period.

Current wording

Interest expense was flat at approximately $3.4 million for both the three months ended September 30, 2026 and 2025. Interest expense was approximately $10.5 million and $10.9 million for the nine months ended September 30, 2026 and 2025, respectively. This decrease of $0.4 million in interest expense was a result of lower interest rates and lower average borrowings outstanding during the nine months ended September 30, 2026 in comparison to the prior year comparable period.

Previous wording

Our effective income tax rate was approximately 23.1% and 25.4% for the three months ended June 30, 2026 and 2025, respectively. Our effective income tax rate was approximately 21.1% and 71.4% for the six months ended June 30, 2026 and 2025, respectively.

Current wording

Our effective income tax rate was approximately 37.7% and 22.3% for the three months ended September 30, 2026 and 2025, respectively. Our effective income tax rate was approximately 28.8% and 21.9% for the nine months ended September 30, 2026 and 2025, respectively.

Previous wording

The effective income tax rate for the three months ended June 30, 2026, was higher than the statutory rate primarily due to limitations on the deductibility of certain compensation expenses. The effective income tax rate for the three months ended June 30, 2025 was higher than the statutory rate primarily due to the impact of an unfavorable discrete item related to stock compensation.

Current wording

The effective income tax rate for the three months ended September 30, 2026, was higher than the statutory rate primarily due to non-deductible transaction costs. The effective income tax rate for the three months ended September 30, 2025 was higher than the statutory rate primarily due to the impact of foreign currency losses.

Previous wording

The effective income tax rate for the six months ended June 30, 2026, was higher than the statutory rate primarily due to limitations on the deductibility of certain compensation expenses. The effective income tax rate for the six months ended June 30, 2025, was higher than the statutory rate primarily due to the reversal of valuation allowances.

Current wording

The effective income tax rate for the nine months ended September 30, 2026, was higher than the statutory rate primarily due to non-deductible transaction costs. The effective income tax rate for the nine months ended September 30, 2025, was higher than the statutory rate primarily due to the impact of foreign currency losses.

Previous wording

On July 4, 2025, H.R.1, commonly referred to as the One Big Beautiful Bill Act ("OBBBA"), was enacted, which includes a broad range of tax reform provisions. These tax reform provisions include the extension and modification of certain provisions of the Tax Cuts and Jobs Act and are effective for calendar year 2025. The changes include, but are not limited to, immediate expensing of domestic research and development expenditure, the restoration of 100% bonus depreciation, and an EBITDA-based interest expense limitation. These provisions did not have a material impact on the Company’s financial statements for the three and six months ended June 30, 2026.

Current wording

On July 4, 2025, H.R.1, commonly referred to as the One Big Beautiful Bill Act ("OBBBA"), was enacted, which includes a broad range of tax reform provisions. These tax reform provisions include the extension and modification of certain provisions of the Tax Cuts and Jobs Act and were effective for calendar year 2025. The changes include, but are not limited to, immediate expensing of domestic research and development expenditure, the restoration of 100% bonus depreciation, and an EBITDA-based interest expense limitation. These provisions did not have a material impact on the Company’s financial statements for the three and nine months ended September 30, 2026.

Previous wording

During the six months ended June 30, 2026, cash provided by operating activities was $17.7 million, representing a year-over-year increase of $21.3 million, or 590%. This increase was primarily attributable to an increase in net income and movements in working capital, primarily due to higher collections of accounts receivable as compared to the prior year comparable period.

Current wording

During the nine months ended September 30, 2026, cash provided by operating activities was $29.4 million, representing a year-over-year increase of $28.6 million, or 3,392%. This increase was primarily attributable to an increase in net income and movements in working capital, primarily due to higher collections of accounts receivable as compared to the prior year comparable period.

Previous wording

During the six months ended June 30, 2026, cash used in investing activities was $11.9 million, representing a $0.4 million increase compared to the prior year comparable period. The increase is primarily attributable to increased expenditures for property, plant, and equipment and intangible assets, partially offset by an increase in proceeds from sale of equipment.

Current wording

During the nine months ended September 30, 2026, cash used in investing activities was $25.0 million, representing a $6.0 million increase compared to the prior year comparable period. The increase is primarily attributable to increased expenditures for property, plant, and equipment and intangible assets.

Previous wording

Net cash used in financing activities was $11.2 million for the six months ended June 30, 2026, compared to net cash provided by financing activities of $14.9 million for the six months ended June 30, 2025. During the six months ended June 30, 2026, net payments of debt were approximately $9.5 million compared to net borrowings of debt of $16.4 million in the prior year comparable period.

Current wording

Net cash used in financing activities was $12.3 million for the nine months ended September 30, 2026, compared to net cash provided by financing activities of $26.2 million for the nine months ended September 30, 2025. During the nine months ended September 30, 2026, net payments of debt were approximately $10.0 million compared to net borrowings of debt of $27.7 million in the prior year comparable period.

Previous wording

The effect of exchange rate changes on our cash and cash equivalents was a decrease of $0.6 million in the six months ended June 30, 2026, compared to an increase of $1.8 million for the six months ended June 30, 2025.

Current wording

The effect of exchange rate changes on our cash and cash equivalents was a decrease of $1.2 million in the nine months ended September 30, 2026, compared to an increase of $1.4 million for the nine months ended September 30, 2025.

Previous wording

As of June 30, 2026, we had cash and cash equivalents totaling $22.0 million and $106.3 million of unused commitments under our Credit Agreement with borrowings of $170.5 million and $3.8 million of letters of credit outstanding. We finance operations primarily through our existing cash balances, cash collected from operations, bank borrowings and capital lease financing. We believe these sources are sufficient to fund our operations for the foreseeable future.

Current wording

As of September 30, 2026, we had cash and cash equivalents totaling $19.0 million and $101.7 million of unused commitments under our Credit Agreement with borrowings of $172.3 million (consisting of $85.0 million under the revolving credit facility and $87.3 million under the term loan, net of unamortized debt issuance costs) and $3.3 million of letters of credit outstanding. We finance operations primarily through our existing cash balances, cash collected from operations, bank borrowings and capital lease financing. We believe these sources are sufficient to fund our operations for the foreseeable future.

Previous wording

The terms of our Credit Agreement are described in Note 11-Long-Term Debtof the Notes to the Unaudited Condensed Consolidated Financial Statements, under the heading "Senior Credit Facility". The terms related to the subsequent amendment to the Credit Agreement are described in Note 15 -Subsequent Events.

Current wording

The terms of our Credit Agreement are described in Note 11-Long-Term Debtof the Notes to the Unaudited Condensed Consolidated Financial Statements, under the heading "Senior Credit Facility".

Previous wording

Except for the subsequent amendment to the Credit Agreement described in Note 15 -Subsequent Events, there have been no significant changes in our contractual obligations and outstanding indebtedness from those disclosed in our 2025 Annual Report.

Current wording

Except for the Amendment to the Credit Agreement described in Note 11-Long-Term Debt, there have been no significant changes in our contractual obligations and outstanding indebtedness from those disclosed in our 2025 Annual Report.